Michael McGrath (Cork South Central, Fianna Fail)
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28. To ask the Minister for Finance the number of initiatives he has announced which have not commenced as they are awaiting EU state aid approval; and if he will make a statement on the matter. [37056/14]

Michael Noonan (Limerick City, Fine Gael)
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Living City Initiative

The Living City Initiative, announced in Finance Bill 2013, is a pilot project which provides certain tax incentives to make it more attractive for people to live in historic and culturally significant city centre houses. The initiative also offers incentives for retailers and small businesses in those areas. This Initiative is subject to EU State Aid approval and a commencement order. An ex ante cost benefit analysis was conducted in the summer of 2013 and published alongside Budget 2014. An application for EU State Aid approval was submitted in March 2013. It is hoped that this issue will be concluded in the very near future. An independent cost-benefit analysis concluded that the Initiative would create more than 1,000 jobs for each of the 5 years it will be in place. The analysis also concluded that the annual cost would be in the order of €3m per year.

Film Relief

The Film relief scheme has been in place since 1987. Finance Act 2013 introduced new provisions to ensure that Film tax reliefs will accrue to the producers rather than investors and result in tax savings for the Exchequer. Budget 2014 extended the definition of 'eligible individual' to include non-EU talent, in conjunction with the introduction of a withholding tax. It is intended to commence these provisions once EU State Aid approval has been given. The Department of Arts, Heritage and the Gaeltacht are progressing this State Aid approval with the EU Commission. Statistics are not available to show the actual number of persons employed in the film industry. However, it is estimated that in 2013 just over 27,000 individual employments (both part-time and full-time) were generated on film productions supported by Section 481 relief.

Tax scheme for the construction or refurbishment of certain aviation services facilities

A scheme of accelerated capital allowances for the construction and refurbishment of certain buildings and structures for use in the maintenance, repair or overhaul of commercial aircraft, and the dismantling of such aircraft for the purposes of salvaging or recycling of parts or materials was announced in Budget 2013 and an application was made to the EU Commission on 18 June 2013.

The Commission formed the view that the scheme in its current form is not compatible with State Aid guidelines. Following on from meetings and discussions with EU officials, a revised application was recently submitted to the Commission, which I hope will will lead to a positive result in the near future.

Exemption from Stamp Duty

Exemption from Stamp Duty on the transfer of shares of companies listed on the Enterprise Securities Market of the Irish Stock Exchange, is subject to State Aid approval. The proposed measure aims to encourage entrepreneurs and growing businesses to use public equity markets as a source of funding for growth and the creation of jobs.

CGT Entrepreneur Relief

A capital gains tax relief for entrepreneurs who reinvest the proceeds from the disposal of assets made on or after 1 January 2010 in certain chargeable business assets was announced in Budget 2014 and provided for in Section 45 of Finance (No 2) Act of 2013. Commencement of the legislative provisions is subject to EU state-aid approval. Discussions with the EU Commission about State Aid clearance are ongoing. I hope that these will result in a positive outcome in the near future.

Dara Calleary (Mayo, Fianna Fail)
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29. To ask the Minister for Finance his views on the way capital taxes may be reformed to distinguish between passive and active investment; and if he will make a statement on the matter. [37061/14]

Michael Noonan (Limerick City, Fine Gael)
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I assume from the Deputy's references to capital taxes and investment that his question relates to capital gains tax (CGT).

The rate of CGT is currently 33% and has been increased four times since 2008 when it stood at 20%. These rate increases were necessary to protect the yield from CGT in the context of the rebalancing of the public finances. An increase in the taxation of capital is preferable from the point of view of its impact on the economy as compared to an increase in employment taxes such as income tax.

In common with all taxes, CGT is subject to on-going review and all reliefs and exemptions are carefully considered. In the circumstances in which we have found ourselves in recent years, and as opposed to embedding major long-term changes to the tax system which might prove controversial, divisive or unworkable, the approach (particularly in CGT) has increasingly been to introduce changes which are targeted and which apply for short-term periods to achieve focused outcomes.

For example, a CGT relief was introduced in Budget and Finance Act 2012 to incentivise the purchase of property between 7 December 2011 and the end of 2013 with the intention of stimulating activity in the property market. The incentive was subsequently extended to property purchased to the end of 2014. I stated recently that this relief will not be extended further as it has served its purpose.

The incentive applies to industrial, farmland, commercial and residential (buy-to-let) property (land and buildings) purchased to the end of this year. If the property is held for more than 7 years, the capital gains attributable to those 7 years will be exempt from CGT on a proportionate basis relative to the period of ownership. Property sold within the 7 year period subsequent to purchase will not qualify for relief.

Relief for farm restructuring was introduced in Finance Act 2013 on disposals of farm land for the purpose of farm restructuring or consolidation. The relief applies to a sale, purchase or exchange of agricultural land in the period from 1 January 2013 to 31 December 2015 where Teagasc has certified that a sale and purchase or an exchange of agricultural land was made for farm restructuring purposes.

Section 45 of Finance (No 2) Act of 2013 provides for a CGT relief for entrepreneurs who reinvest the proceeds from the disposal of assets made on or after 1 January 2010 in certain chargeable business assets. Commencement of the legislative provisions is subject to EU state-aid approval. Discussions with the EU Commission about State Aid clearance are ongoing. I hope that these will result in a positive outcome in the near future. Notwithstanding that the legislative provisions have yet to be commenced, the CGT relief will only apply, among other conditions, where new chargeable business assets acquired after 1 January 2014  and up to end- December 2018 are disposed of having been held for a minimum period of 3 years after acquisition in that period.

Over the years other reliefs that had been in place for a number of years were reviewed and abolished or restricted. These included roll-over relief and indexation relief.  The relevance of these reliefs had to be weighed against what they were achieving, the cost of the reliefs and the opportunities for providing other more relevant relieving measures.

In the context of this year's Budget and Finance Bill process, I will again consider what changes can be made to the CGT regime in order to encourage and facilitate investment in our improving economic environment.

Pearse Doherty (Donegal South West, Sinn Fein)
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30. To ask the Minister for Finance his plans to implement the recent OECD BEPS report including through legislation. [37047/14]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is no doubt aware we are almost at the halfway point in the OECD BEPS project. Following on from the seven reports released two weeks ago, another batch of deliverables are due for completion in September 2015, with the remaining BEPS reports expected to be finalised in December 2015. We have welcomed the first set of reports as they are the first milestones in this project. However it is important to recognise that the timetable provides reporting timelines and not implementation deadlines. The BEPS actions will be implemented through a mixture of updates to OECD guidelines/recommendations which countries would have to strongly consider implementing in their domestic law, and updates to bilateral tax treaties, which the OECD plans to amend on a multilateral basis by means of an OECD Multilateral Convention. Of the seven recent deliverables, there are: two final reports (Action 1 Digital Economy and Action 15 - Feasibility of a Multilateral Instrument), one interim report (Action 5 Harmful tax practices) and four reports containing draft recommendations (Actions 2 Hybrid mismatches, 6 Treaty abuse, 8 Transfer pricing intangibles and 13 Transfer pricing documentation). The OECD has acknowledged that the recommendations remain draft in order to fully assess the interaction between all the different BEPS workstreams. Therefore the BEPS project is best seen as an overall package which is still in progress. While there is still significant work to be done in finalising the recommendations, the reports are a big step towards addressing problems in the international tax environment.